By Awa Sowe
Despite the tremendous progress that has been made to advance women’s financial inclusion and economic empowerment, women still face significant socio-economic barriers that constrain their ability to contribute meaningfully to their communities, countries, and continental development. Majority of African women are either unemployed, under-employed, or vulnerably employed. This is largely due to the disproportionate burden that women face in caring for their children and families, which constrains their ability to seek and keep jobs and participate fully in economic activities.
In addition, women entrepreneurs are predominantly in the informal sector with limited access to capital and other formal financial services. They are hindered by the lack of essential skills to effectively manage and sustain businesses, and take advantage of available financial services, products, and other existing business opportunities. Only a limited number of financial institutions understand the unique needs of women offer relevant products and services that adequately respond to their needs. This underlines the critical need to address gender disparities in access to financial resources, economic opportunities, and social services. Estimates by the UN, show that the annual deficit in spending on gender equality measures amounts to a staggering USD 360 billion.
Africa’s Agenda 2063 provides a comprehensive framework for addressing key challenges and harnessing the potential of African women as drivers of sustainable development. Through initiatives such as the African Women’s Decade on Financial and Economic Inclusion 2020- 2030, and existing policies such as the AU Strategy for Gender Equality & Women’s Empowerment, the Protocol to the African Charter on Human and Peoples’ Rights on the Rights of Women in Africa (Maputo Protocol), the Solemn Declaration on Gender Equality in Africa (SDGEA) and the African Charter on the Rights and Welfare of the Child, the AU has demonstrated its commitment to advancing gender equality and women’s empowerment across the continent.
In the pursuit of gender equality, financial inclusion stands out as a critical frontier. Despite significant strides in various sectors, women in sub-Saharan Africa continue to face disproportionate challenges in accessing financial services. The digital revolution has ushered in unprecedented opportunities for economic growth, connectivity, and innovation. However, it also presents challenges, particularly in ensuring that these benefits are accessible to all, regardless of gender.
Empowering women through financial inclusion not only fosters gender equality but also stimulates economic growth, enhances social well-being, and leads to more resilient and inclusive societies.
One person is working towards the realization of the above-mentioned objective of empowering women through financial inclusion is Ndey Fatou Njie, founder of TIGA Gambia. In an interview, she affirmed that female entrepreneurship is important for business and economic development. She however pointed out those women face greater obstacles than men in accessing financing and information, making it more difficult for them to engage in entrepreneurship.
She went on to explain that financial exclusion hinders economic growth and development because it prevents the lower segment’s access to funds, impedes human asset and physical capital accumulation, and denies investment growth.
“The influence of financial exclusion diminishes the development apparatus of most nations because economic activities privilege larger companies. Alternatively, the distribution of financial resources among the competing forces without excluding any sector may bring about a more significant impact on a nation’s growth and national income” Miss Njie explained.
She therefore believes that all economic agents in an economy should have equal access to funds and develop at their own pace without any form of restriction. She was however quick to say that in The Gambia, over the years women financial inclusion has taken a turn as women dominate micro and small enterprises, access financial resources as well as ensure women’s financial inclusion.
Barriers to women’s financial inclusion
Several factors contribute to the gender gap in financial inclusion:
• Cultural norms and discrimination: In many societies, cultural norms limit women’s participation in financial activities. These norms can result in restricted mobility, limited decision-making power, and discriminatory practices that prevent women from owning assets or accessing credit.
• Gender bias in tech: Stereotypes and biases persist within the tech industry, creating barriers for women pursuing STEM (Science, Technology, Engineering, and Mathematics) careers. Encouraging girls’ interest in tech from an early age and promoting female role models are critical steps to address this issue.
• Lack of Financial Literacy: Women often have lower financial literacy levels than men, which hinders their ability to effectively engage with financial products and services, making them less likely to seek out or benefit from these services.
• Economic Disparities: Women generally earn less, save less, and are less likely to have stable employment than men. These economic disparities limit their capacity to participate fully in the financial system.
• Digital Divide: Access to digital technologies, which are increasingly crucial for financial inclusion, is often limited for women, especially in rural and underserved areas. This digital divide further exacerbates the gender gap in financial services.
Mrs Nyima Jobarteh also postulated that equal gender representation in business and eliminating discrimination towards women workers and managers can increase profitability and productivity
She observed that women-led enterprises demonstrate strong performance for banks and that it has long been established that since women are more likely than men to spend resources on supporting their families and communities, an increase in women’s income has a cascading impact on the welfare of households, communities and economies.
Strategies for empowering women through financial inclusion
Addressing these barriers requires targeted strategies and interventions:
• Policy and Regulatory Reforms: Governments can implement policies that promote gender equality in financial access. This includes creating legal frameworks that ensure women’s property rights, encouraging financial institutions to develop women-friendly products, and providing incentives for women entrepreneurs.
• Financial Education and Literacy Programmes: Enhancing women’s financial literacy is essential for their empowerment. Tailored financial education programmes can equip women with the knowledge and skills needed to manage finances, understand financial products, and make informed decisions.
• Digital Financial Services: Expanding access to digital financial services, such as mobile banking and online payment platforms, can significantly improve women’s financial inclusion. Initiatives like providing affordable internet access and digital literacy training are critical components of this strategy.
• Supporting Women Entrepreneurs: Providing access to credit, business training, and mentorship programmes can help women entrepreneurs thrive. Financial institutions should design products that cater to the unique needs of women-led businesses and create support networks that foster their growth.
• Community Engagement and Advocacy: Engaging community leaders and organisations in promoting financial inclusion for women can help shift cultural norms and address social barriers. Advocacy campaigns can raise awareness about the importance of women’s financial empowerment and encourage community-wide support.
Financial inclusion, understood as the access to a diverse range of quality financial products and services, has become a subject of considerable interest for governments, researchers, and society in general. This interest is associated with the recognition of large gaps in financial inclusion throughout the world, which presents challenges to achieving economic stability and development. By gaps in financial inclusion we refer to the differences in access to and usage of financial products, both bank assets and liabilities. As noted by Demirguc-Kunt, Klapper, and Singer (2013), by promoting financial inclusion, we help address and reduce inequalities, thereby reducing poverty and improving economic development.
